Problem: A circle of radius 1 is surrounded by 4 circles of radius $r$ as shown. What is $r$?

[asy]
unitsize(0.6cm);
for(int i=0; i<2; ++i){
for(int j=0; j<2; ++j){
draw(Circle((-2.4+4.8i,-2.4+4.8j),2.4),linewidth(0.7));
draw((-2.4+4.8i,-2.4+4.8j)--(-0.7+4.8i,-0.7+4.8j));
label("$r$",(-1.5+4.8i,-1.5+4.8j),SE);
};
}
draw(Circle((0,0),1),linewidth(0.7));
draw((0,0)--(1,0));
label("1",(0.5,0),S);
[/asy]
Answer: Construct the square $ABCD$ by connecting the centers of the  large circles, as shown, and  consider the isosceles right  $\triangle BAD$.

[asy]
unitsize(0.6cm);
pair A,B,C,D;
A=(-2.4,2.4);
B=(2.4,2.4);
C=(2.4,-2.4);
D=(-2.4,-2.4);
draw(A--B--C--D--cycle,linewidth(0.7));
draw(B--D,linewidth(0.7));
label("$A$",A,NW);
label("$B$",B,NE);
label("$C$",C,SE);
label("$D$",D,SW);
label("2",(0,0),SE);
for (int i=0; i<2; ++i){
label("$r$",(-2.4,-1.2+2.4i),W);
label("$r$",(-1.2+2.4i,2.4),N);
label("$r$",(-1.5+3i,-1.5+3i),NW);
}
for(int i=0; i<2; ++i){
for(int j=0; j<2; ++j){
draw(Circle((-2.4+4.8i,-2.4+4.8j),2.4),linewidth(0.7));
};
}
draw(Circle((0,0),1),linewidth(0.7));
[/asy]


Since $AB = AD = 2r$ and $BD = 2 + 2r$, we have $2(2r)^2 = (2 + 2r)^2$. So \[
1+2r+r^{2}=2r^{2}, \quad \text{and} \quad r^{2}-2r-1=0.
\]Applying the quadratic formula gives $r=\boxed{1+\sqrt{2}}$.